Sovereign Wealth Funds Briefing - Archive | March, 2010

From Globalarabnetwork.com: Through the creation of sovereign wealth funds (SWFs), the Gulf States, along with their Asian counterparts, are now reaping rewards in strategic investments in US and European property and share holdings, as well as bolstering the liquidity of western banks, just when all these are facing a squeeze on capital.
The SWFs’ response to the 2007/08 sub-prime crisis, where Gulf-based funds have bought further into Citigroup, Merrill Lynch, UBS and other giants, highlights their leading role in the global economy……………………………..Full Article: Source

From Theglobeandmail.com: Australia’s Future Fund, the country’s version of a sovereign wealth fund, says it won’t back Ontario Teachers’ Pension Plan and Canada Pension Plan Investment Board in its attempt to buy control of toll road operator Transurban.

CPPIB and Teachers’ floated a bid for Transurban last year that was rejected by the toll operator. Then, word came out that the Future Fund was going to join in, lending heft and credibility to the pursuit of the target……………………………..Full Article: Source

From Reuters: The Future Fund, Australia’s sovereign wealth fund has ended talks to back a $4.5 billion plan by two Canadian pension funds to buy out toll road operator Transurban, sending its shares down 6 percent.
Transurban has been courted for months by the Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan, which owns about 28 percent of the group, but the sides have been in a stand-off since Transurban rejected their A$5.25 a share offer in November……………………………..Full Article: Source

From Eeo.com.cn: China Investment Corporation (CIC), China’s sovereign wealth fund, began to focus on investment in private equity funds and domestic heavy industry from the beginning of this year, according to a detailed list of the CIC investments made in the second half of 2009 acquired by the EO.
According to the inventory list, on February 4th, CIC invested 1.52 billion US dollars for a 2.3 percent stake in British private equity fund Apax……………………………..Full Article: Source

From Reuters: China Central Huijin Investment Ltd., the domestic arm of China’s sovereign wealth fund, has applied for a $50 billion cash injection from the Chinese government, the National Business Daily said on Wednesday.
China Investment Corp (CIC), parent of Huijin, has submitted an application for cash aid to the State Council, the country’s cabinet, the semi-official paper said, citing an unnamed CIC source……………………………..Full Article: Source

From Reuters: Bank of China, China’s fourth largest bank, said on Tuesday it was in talks with Temasek Holdings, Singapore’s sovereign wealth fund, to set up a rural business bank in China.
The bank under discussion would have 40-60 branches, President Li Lihui told reporters at a media briefing to discuss Bank of China’s 2009 results……………………………..Full Article: Source

From Financialexpress.com: The petroleum ministry has mooted the idea of a sovereign fund to help finance acquisition of energy assets by Indian companies abroad. The ministry has proposed setting aside a part of India’s $254 billion forex reserves for this purpose.
This is a welcome move because it would help Indian companies like ONGC Videsh (OVL) to take on competition from their Chinese counterparts that are backed by a similar fund created by the Chinese government……………………………..Full Article: Source

From Businessweek.com: Khazanah Nasional Bhd. will explore international acquisitions in Asia instead of high-profile purchases of Western companies, said Azman Mokhtar, managing director of the Malaysian state investment agency today.

It will target buying opportunities in Southeast Asia, especially Indonesia and Singapore, as well as in China, India and the Middle East, Azman told Bloomberg Television outside a Credit Suisse Group AG-sponsored conference in Hong Kong……………………………..Full Article: Source

From Bernama: The government has directed Khazanah Nasional Bhd and the Employees Provident Fund to hasten the divestment of their equity holdings in government-linked companies to make the capital market more atttractive to foreign fund managers, Prime Minister Datuk Seri Najib Tun Razak said.

“We have been doing so but we have to do more as the market wants us to reduce government holdings and I have given the direction to Khazanah and EPF to act accordingly,” he said……………………………..Full Article: Source

From Thejakartaglobe.com: PT Bumi Resources, the country’s largest coal miner, is seeking acquisitions at home and overseas as the price for power-station fuel rises around the world. China Investment Corp., the Chinese sovereign wealth fund, bought $1.9 billion of debt from Bumi in September.

“We want to get as large as possible as quickly as possible and focus on international expansion that we believe pays better-than-average shareholder returns,” Bumi director Ken Farrell said on the sidelines of a conference in Singapore on Tuesday……………………………..Full Article: Source

From AP: State Revenue Department officials are reminding Alaskans that they have nine more days to apply for Alaska Permanent Fund dividends. The deadline is March 31.

PFD Operations Manager Dan DeBartolo says Alaskans can apply on line at http://www.pfd.alaska.gov and receive immediate confirmation that their applications were completed……………………………..Full Article: Source

From Tradearabia.com: Abu Dhabi plans to set up a dedicated investment agency to attract foreign investment, an Abu Dhabi government official said on Tuesday.

‘In line with our five-year strategic plan, the department is working towards setting up a dedicated investment agency to serve the needs of international investors,’ said Mohamed Omar Abdullah, under secretary of the emirate’s department of economic development……………………………..Full Article: Source

From Reuters: Ghana’s Finance Minister is seeking to create two investment funds fed by future oil revenues that would fill budget gaps and preserve the West African nation’s hoped-for energy wealth, according to a draft of the proposal posted on the ministry’s website.

The proposal would also rule out government borrowing against future crude production in the country, a leading cocoa and gold producer which is on track to be a commercial oil exporter by the end of this year……………………………..Full Article: Source

From AFP: The Gulf emirate of Qatar is looking for more German investment opportunities after becoming the third biggest shareholder in Volkswagen, a top official told the business daily Handelsblatt.
Germany “now seems to be open again to investment,” he added in reference to efforts two years ago to limit the access of sovereign wealth funds from Gulf countries, China and Russia to German companies……………………………..Full Article: Source

From Businessweek.com: Volkswagen AG will sell new shares in a rights issue valued at as much as 4.7 billion euros ($6.4 billion) to help finance the takeover of Porsche SE’s auto-making unit. Qatar Holding, part of the country’s sovereign wealth fund, said it remains a long-term investor in Volkswagen.

VW will offer as many as 65 million preferred shares, with the sale price, subscription ratio and offer volume to be decided by March 26, the company said in a statement today……………………………..Full Article: Source

From Guardian: Creditors of Dubai World, which include RBS and Lloyds, could be forced to accept repayment delays of as much as nine years in a sign that the recession is putting pressure on lenders to take what they can out of troubled investments.

Dubai World, which last year stunned financial markets by asking creditors to postpone some of its debt payments, is expected to announce a $26bn (£17.3bn) debt restructuring plan within days……………………………..Full Article: Source

From Reuters: Egypt’s Beltone Private Equity and Sudan’s Kenana Sugar Company will launch a $1 billion agricultural investment fund next week. Kenana’s biggest shareholders include the Kuwait Investment Authority with 30.5 percent.
Gulf and other Arab countries have been investing in a range of farming projects in Sudan, Africa’s biggest country by area and long viewed as having huge agricultural potential……………………………..Full Article: Source

From Arabianbusiness.com: Qatar Investment Authority, the country’s sovereign wealth fund, invested $30 billion last year and may match that in 2010, Qatar’s prime minister said.

Speaking at a press conference in Doha on Monday with Bulgaria’s Prime Minister Boiko Borissov to announce a cooperation agreement between the two countries, Sheikh Hamad Bin Jasim Bin Jaber Al Thani said: “We are thinking to invest the same amount this year.”……………………………..Full Article: Source

From Reuters: Singapore sovereign wealth fund Temasek Holdings wants to increase its exposure to mining in Mongolia and is also looking for opportunities to invest in the mining sector in Africa.

“We made investments in Mongolia and we are fairly bullish about Mongolia,” said Nagi Hamiyeh, managing director of investments at Temasek, on the sidelines of a mining conference in Singapore on Tuesday………………………………Full Article: Source

From Arabfinance.com: Mubadala Development Co., an Abu Dhabi government-backed investor with stakes in Carlyle Group and Ferrari SpA, posted a total comprehensive income of 8.6 billion dirhams ($2.3 billion) last year on investment gains.

Revenue almost doubled to 13.1 billion dirhams and total assets rose 75 percent to 88.5 billion dirhams, Mubadala said in an e-mailed statement today. The main contributors to the revenue were Dolphin Energy Ltd., SR Technics and changes in the valuation of investments in Advanced Micro Devices Inc., Aldar Properties PJSC, and Emirates Integrated Telecommunications Co………………………………Full Article: Source

From Thenational.ae: Mubadala Development, the Government’s strategic investment arm, made Dh8.6 billion (US$2.3bn) in profits last year as revenues nearly doubled and the value of its investments surged, while its need for Government financing dwindled.

Mubadala’s energy and aviation subsidiaries contributed heavily to the profits, as did income from property developments and sales. A Dh3bn gain on stock in Advanced Micro Devices (AMD), the US microchip maker, and General Electric, the US conglomerate, also buoyed the results………………………………Full Article: Source

From Thenational.ae: Mubadala Development, the Abu Dhabi Government’s strategic investment arm, is becoming less reliant on government funding and diversifying its sources of revenue to lay the foundations for the next stage of growth, the company says.

Mubadala yesterday reported profits of Dh8.6 billion (US$2.34bn) for last year in its annual financial statement, and said it received Dh8.75bn in cash contributions from the Government………………………………Full Article: Source

From Saba: Mubadala Development Company of United Arab Emirates voiced on Monday desire to invest in fields of in oil, gas and minerals in Yemen.

In a meeting with the Minister of Oil Amr al-Idarows, the delegation of the company presented a suggestion over holding a partnership of investment in Yemen including to be a partner with Safar Old Company to increase production in block No.18………………………………Full Article: Source

From Businessweek.com: Mubadala Development Co., an Abu Dhabi government-backed investor, will raise its stake in General Electric Co. as market conditions permit, Chief Operating Officer Waleed al Mokarrab said in a conference call.

Mubadala and GE “began deploying capital” from their $8 billion joint venture in the second half of last year, al Mokarrab said………………………………Full Article: Source

From Thenational.ae: From the canyons of Wall Street to the shores of the Gulf, calls for financial institutions to be more transparent are louder than ever. In the UAE, they do not appear to have fallen upon deaf ears.

Earlier this month the world’s largest sovereign wealth fund, ADIA, made its most extensive disclosure of its holdings to date. And as we report today, Mubadala, an investment vehicle owned by the Abu Dhabi Government and established to diversify the emirate’s economy, has released a comprehensive statement of its performance………………………………Full Article: Source

From Businessweek.com: Previ, the pension fund for Banco do Brasil SA employees, signed a memorandum of understanding with the sovereign wealth fund of Qatar to study a partnership in businesses in Brazil, Valor Economico reported, citing Previ President Sergio Rosa.

Previ has also had talks on possible partnerships with the sovereign wealth fund of China, the Sao Paulo-based newspaper said………………………………Full Article: Source

From Alaskadispatch.com: State employees get two kinds of benefits after they retire: pensions and non-pension benefits, like health care. Across the country, most state governments face growing challenges funding those benefits. Compared to other states, though, Alaska is an outlier.

Only five states have fully funded pensions, and no state is anywhere close to fully funding the non-pension benefits it owes. ……………………………..Full Article: Source

From Globaltimes.cn: Another China Investment Corp., a national assets management company arranged by State-owned Assets Supervision and Administration Commission of the State Council (SASAC) is expected to be established in the first half of 2010, said Shao Ning, deputy director of SASAC on March 21.

The second version of sovereign wealth fund will have an operational budget of state assets this year as its registered capital totaling 44 billion yuan ($6.45 billion)………………………………Full Article: Source

From WSJ: Dubai World may ask creditors for five to eight years to re-pay its $22 billion in debt as part of a restructuring proposal that could come as early as this week, people close to the matter say.

The Emirates-based, conglomerate and its creditors are also weighing a structure that would give creditors a share of the proceeds from asset sales, or possibly a share in future profit of the group, if it cannot fully meet its interest-payment obligations, one of these people said………………………………Full Article: Source

From Timesonline.co.uk: Sovereign wealth funds have been keeping their heads down. Falling asset values, sliding oil prices and big deals gone sour forced many to close their wallets in 2008 and 2009. But all that is about to change.
A fresh round of big deals is going to thrust the funds — regarded by some as the bogeymen of international finance — back into the spotlight………………………………….Full Article: Source

From China Knowledge: GCL-Poly Energy Holdings Ltd, a foreign-owned independent cogeneration plant operator in China, will start a solar power project with China Investment Corp in the near future, said an officer of the Hong Kong-listed firm.

CIC, a state-owned investment firm based in Beijing, currently holds a 20% stake in GCL-Poly Energy Holdings. The two partners have set up a joint venture to develop the solar power market in China, the U.S. and Europe. The listed firm has a 51% stake in the JV, which has a registered capital of US$500 million………………………………….Full Article: Source

From Maktoob.com: Barwa Real Estate’s merger with fellow developer Alaqaria has received approval from the Gulf Arab country’s financial regulator. Qatari Diar, the property arm of the cash-rich state’s sovereign wealth fund, will own 45% of the newly formed developer.

“Following the launch of its offer to acquire the share capital of Qatar Real Estate Investment Co. (Alaqaria) on 9 March 2010, Barwa Real Estate Co. (Barwa) today announced that following approval from the Qatar Financial Markets Authority the offer document is now available,” the property companies said in an emailed statement………………………………….Full Article: Source

From Business24-7.ae: McLaren Automotive has reached deals in the UAE and the Gulf to appoint new dealers for its upcoming cars. McLaren’s current shareholders are Bahrain-based sovereign wealth fund Mumtalakat Holding Company, Mansour Ojjeh’s TAG Group and Dennis.
Ian Gorsuch, Regional Director for Middle East, Africa and Asia Pacific at McLaren Automotive, said the company will announce the new dealers next week and most of the distributors were already dealing in high-end cars of other brands………………………………….Full Article: Source

From Guardian: Manchester United supporters are planning to table a £1.25 billion bid for the football club by June in a move that would lead to fans holding a majority stake. It is understood that several sovereign wealth funds have also expressed an interest in the deal.

The campaign to wrest control of the club from the Glazer family is being spearheaded by a group of businessmen, who have dubbed themselves the Red Knights………………………………….Full Article: Source

From MNI: Mexico Finance Minister Ernesto Javier Cordero Arroyo Sunday said the government will be able to add significantly to its stabilization fund this year as the result of expected increases in tax revenues and oil export earnings.
That increase along with a $48 billion Flexible Credit Line from the International Monetary Fund which is expected to be renewed shortly, will create a fortified “war chest” to protect Mexico from a potential reversal of funding in coming years, Cordero said………………………………….Full Article: Source

From Businessweek.com: Citigroup Inc plans to double the size of a team helping pension and government-backed funds manage direct hedge fund investments. Pensions, sovereign wealth funds and foundations, which are emerging as the largest allocators, may increasingly bypass the traditional fund-of-funds investing for more direct investment in hedge funds.

The targeted increase of the now 30-person consulting team may be completed within 18 to 24 months, London-based Roe said in an interview in Hong Kong on March 19. Asia may get a disproportionate number of the additions as the bank expands the services from Europe and the U.S. to the region………………………………….Full Article: Source

From Zawya.com: 2010 should be a year of improvement for the Middle East as a sluggish global recovery gains momentum and investor confidence rebuilds. Swelled by the accumulation of oil-driven fiscal surpluses over the past decade, sovereign wealth funds can be drawn down to finance potential fiscal deficits without jeopardizing planned investment expenditure.

Indeed, Moody’s only sovereign rating actions in the region so far this year have been positive: the upgrade of Saudi Arabia’s government bond ratings to Aa3 from A1 and Oman’s to A1 from A2 based on the strong state of their government finances………………………………….Full Article: Source

From Moneycontrol.com: Bankers will see Dubai’s plans to restructure USD 26 billion in debt as a kickoff in a long game and not a goal if other high-profile restructurings, such as Russian aluminium producer UC RUSAL are a guide.

Dubai World, the holding company harbouring the emirate’s flagship property firm Nakheel, builder of palm-shaped islands, is the playing field for one of the biggest emerging markets debt dramas ever, and an announcement is expected this week………………………………….Full Article: Source

From Komfie Manalo, Opalesque Asia: The Abu Dhabi Investment Authority (ADIA), one of the largest sovereign wealth funds in the world, has allocated as much as 10% of its estimated $425 in assets to hedge funds and managed funds, the firm said in its 2009 annual report.

The report provided little details about the fund, but it also marks the first time that ADIA revealed some transparency over its portfolio. ADIA has long kept secret the size of its assets and gives very little information in its annual report, even as banks and other fund managers continue to try to find ways to gain allocations to manage portions of its multi-billion dollar portfolios………………………………..Full Article: Source

From IPE: The investment returns of the Abu Dhabi Investment Authority (ADIA) amounted to 8% annualised in dollar terms over the 30 years to end-December 2009, and 6.5% over 20 years. This is according to the authority’s first annual report since its inception in its present form in 1976.
To the end of 2008, the 30-year return was slightly less, at 7.6%, while the 20-year return amounted to 6.1%……………………………….Full Article: Source

From Domain-b.com: Constantly being out bid by sovereign fund-backed rival China for overseas energy acquisitions, despite foreign exchange reserves of $283.5 billion, India has finally realised the need to have a sovereign wealth fund to help its oil companies make much needed energy acquisitions overseas.
Such a fund would have proved valuable in acquiring foreign resources when the value of hydrocarbon assets had plunged due to the recession, with oil falling to a low of around $42 a barrel in late 2008 and early 2009………………………………..Full Article: Source

From Gulfnews.com: Citigroup has operated in the Arab world for almost 50 years and the Gulf came to the rescue of the embattled bank in the early stages of the credit crunch when the sovereign wealth funds of Abu Dhabi and Kuwait pumped billions into the US-based lender.

However, the relationships with two of the world’s largest institutional investors have since soured………………………………..Full Article: Source

From Trend.az: So far, about $2bln was invested in the Azerbaijani transport sector with a view to its development, Azerbaijani Transport Minister Ziya Mammadov said. Construction on the Georgian territory is financed by the State Oil Fund of Azerbaijan.
It is financed by a loan allocated to Georgia to the amount of $ 200 million………………………………..Full Article: Source

From Topnews.ae: The crisis hit Dubai World has been heading for completing its restructuring plans worth $26 billion debt according to Sheikh Ahmad Bin Saeed Al Maktoum, the Chairman of the Dubai Supreme Fiscal Committee.

He said that soon a positive outcome is coming that will help to reinstate investors confidence that was lost due to Dubai World’s failure to meet its financial obligations. He declined to further divulge the matter given to its financial importance. He said that Dubai would soon achieve its past glories and achieve new heights of growth after completing the restructuring process………………………………..Full Article: Source

From WSJ: “The biggest thought is, we wanted to make sure we grouped assets so we understood why we owned them and what we expected them to do in various scenarios,” says Michael Burns, chief executibe of Alaska’s $35 billion Permanent Fund Corp., which changed its categories for assets last year.
Public pensions are increasingly asking a question that has haunted investors since the financial crisis: When is an alternative investment really more of the same?……………………………….Full Article: Source

From Allafrica.com: The Federal Government has started dipping its hands into the revenue accrued into the excess crude account to offset its pilling debt of oil subsidy owed marketers, Daily Trust investigation has revealed.

Earlier, it was thought that the Nigerian National Petroleum Corporation (NNPC) was paying the subsidy claims of marketers on government’s behalf………………………………..Full Article: Source

From WSJ: Chile’s President Sebastian Pinera said he is looking to dip into the country’s sovereign wealth fund, secure foreign credit and implement fiscal austerity.
There is also talk, however, his government will raise taxes, including the royalty on copper mining companies, and it will seek to increase the cap on local sovereign bond issues to around $10 billion from the existing $6 billion limit set by Congress for this year………………………………..Full Article: Source

From Commodityonline.com: Vietnam’s foreign-currency reserves declined about 35 percent to around $15 billion by the end of last year. The holdings have dropped from $23 billion at the end of 2008.
Vietnam’s sources of foreign currency fell last year after the country posted a deficit of $12.25 billion and direct investment pledges from abroad declined more than 64 percent to $21.5 billion………………………………..Full Article: Source